ST. PAUL - Minnesota cities and counties will not lose state aid payments later this month.

Gov. Tim Pawlenty's office this afternoon announced he will not reduce or eliminate local aid December payments to help plug a $1.2 billion hole in the current two-year budget. Last week, Pawlenty said that he would consider taking that action.

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But the Republican governor did not rule out future cuts.

In a letter to city and county leaders, the governor wrote: "Given the imminent expected payment of December local aid, I have determined that additional local aid program cuts, if any, should be focused on future payments."

A year ago, Pawlenty faced another deficit and he reduced local payments that were due around Christmas. That put cities and counties in a bind, they said, because their budgets already included the state aid payments and they had no way to make changes so late in the year.

About $437 million in state aid payments are to be sent to cities and counties later this month.

Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.